As Synovus Chairman and Chief Executive Officer Kessel Stelling unveiled his banking company’s third-quarter earnings report Tuesday, he also touched on Hurricanes Michael and Florence, as well as the firm’s pending $2.9 billion buyout of South Florida-based FCB Holdings Inc.
The bottom line: Synovus, headquartered in Columbus, posted a profit, or net income, of $99.3 million, or 84 cents per share, in the July-through-September period. That’s an increase from $95.4 million, or 78 cents per share, in the same quarter of 2017.
The third-quarter profit came on total revenues of $363.3 million, which were down $34.7 million from $398 million in the same three-month period a year ago. The mix of moving financial parts from a year ago included the $75 million fee the bank received from its assistance in the acquisition of Cabela’s by competitor Bass Pro Shops.
Here are other highlights from the Southeast regional bank’s third quarter report and its conference call Tuesday with Wall Street analysts who follow the company:
Recovering from devastation wrought by Hurricanes Florence, Michael
In recent weeks, Hurricane Florence devastated portions of South Carolina with flooding rains, while Hurricane Michael hammered the Florida Panhandle with Category 5 winds and a deadly storm surge. Synovus has banks, employees and customers in both areas.
“Following each storm we deployed our bankers to check on customers in affected areas to assess any impact and develop a plan,” Stelling said on the call, noting there were very few requests for relief from loan payments in the Carolinas. He noted most customers in hard-hit Florida appeared to be fully covered by insurance, thus minimizing the impact on the firm’s financial numbers.
“Our thoughts and prayers are with our team members and customers and everyone else in the impacted areas whose lives have been affected,” the CEO said. “We’ve taken several steps to support our customers in these … declared disaster areas by (the Federal Emergency Management Agency) in the Carolinas, Florida and Georgia. These steps include refunds of late fees, refunds of ATM charges, temporary suppression of credit bureau reporting for those in impacted areas and, when requested by impacted customers, we will offer up to a 90-day deferment of payments.”
Merger process is moving along, with date for shareholder vote set
Synovus and FCB Holdings recently set Nov. 29 as the date for respective meetings of each company’s shareholders to discuss and vote on whether or not the two should merge under their July 23 agreement. While Weston, Fla.-based FCB, which owns Florida Community Banks across middle and southern Florida, will meet at a law firm in New York City, Synovus will hold its gathering at Blanchard Hall in downtown Columbus.
Stelling on Tuesday said plans for the merger are already under way, with an integration management office overseeing day-to-day preparations with the help of “very experienced” third-party advisers. The data being crunched includes future cost savings and revenue synergy from the acquisition, along with “talent reviews” to get ready for rolling out the “best possible team going forward.”
“As disclosed in our filings, we have the ability to monitor certain activities up until the time we close the deal,” the CEO said. “I’ll tell you this. Since we have announced our affiliation, we’ve seen nothing that would give us pause for concern.”
As Synovus was going public with its financial information for the third quarter, so was FCB Holdings. The Florida bank posted a profit of $43.5 million, up from $32.2 million a year ago. It noted having spent $3 million thus far on the merger process.
Growth in major cities, new digital technology, and fostering employees
During the call, Stelling touched on a few smaller items. He said Synovus, even as the FCB acquisition moves toward an expected closing early next year, will continue to make investments in talent and new physical bank locations in high-growth markets such as Nashville, Tenn., and Atlanta.
The CEO also said his firm is developing customer-facing digital banking technology that will be launched to customers in the coming months. He mentioned as well that Synovus reached an agreement in September to sell two branches in Mobile, Ala., and another in Daphne, Ala., to Jefferson Financial Credit Union.
Finally, Stelling boasted of the inclusion of his company by American Banker magazine on lists that include the best places to work in the industry and the Top 10 most reputable banks in the U.S.
“Our team members are tremendous and they know that and we’re constantly looking at fresh ways to care for them and foster a work environment and reputation that attracts the best and brightest in our industry,” he said.